Prompt: What was the historic transformation, or change over time, that the author is describing in the reading? According to the historian, why and how did this change take place? Did these changes take place gradually or rapidly, and how did they affect some of the people involved?
Source: Richard White, Railroaded, Chapter 11 “Creative Destruction,” section 2 “Dumb Growth.”
Answer: In the 11th chapter of Railroaded, titled “Creative Destruction,” Richard White has a very peculiar and unusual section that is reflective of the entire book’s message. The section, titled “Dumb Growth,” is mainly about two things, the immediate inefectiveness of the railroad at beneffiting the places it served, and the demise of the bison which both went hand in hand. The chapter’s subject of creative destruction also complements the prompt well, indeed showing a historic transformation, but one that is more unfortunate, rather than welcomed and needed.
The section starts off with two simple questions, which are also the subject of the greater work, “But were the transcontinentals worth their cost? And did their rapid expansion, on balance, yield more benefits than harm?” (White, p.460) White also continues to clarify the immediate criticism of asking such questions, by saying that “The issue was never the choice between railroads and no railroads.” (White, p.460) I found this to be a quite novel and unusual telling of the history of the railroads from this period, being aware of the toll it has taken on animals, environment, and the native population, I haven’t considered that the issue was maybe about too much expansion by the railroads, rather believing that it’s introduction itself brought great harm. Hence, it is a bit of an unusual argument to see on this matter. White says the following about the dumb growth, “The railroads seemed unable to achieve a balance between too much and too little. They enabled farmers and miners to produce far more cattle, wheat, and silver than the world needed.” (White, p.461) This matter of excess and unnecessary production and in turn consumption, is what drove this instance of creative destruction. However, creative destruction is often driven by a need, rather than a desire, and it is desire for profit that railroads wanted to satisfy by expanding into untapped lands, hoping that industry will follow the transportation, an extremely backward plan.
Such an absurd way by the railroads to stimulate rapid economic growth led to a backfire, “Hauling something, even at a loss, was better than hauling nothing.” (White, p.462) Such a business model led to two unfortunate effects, the first being the destruction of the environment as trains would run for the sake of running while transporting little, benefiting the few entrepreneurs and hunters. While the other effect was the artificial creation of industry that normally would not have sprung up through more natural means of there being a demand and a supply, result being that: “Bison became the first victims of dumb growth.” (White, p.462) The story of the bison is intertwined with the story of the Native Americans, both experiencing a severe decline in population beginning in the 1870s. The argument for the hunting and processing of the bison being an artificial industry, is further supported by the figures White provides: “In the years between 1871 and 1879 the hunters reduced the southern herd effectively to zero. Hide hunters supposedly took 3.5 million bison from the southern plains in the 1870s…” (White, p.465) To fractionally reduce the population of a species is an immoral and selfish act, to reduce a fraction of a species simply for the sake of business and trade, not out of necessity to feed the starving is an even more egregious act. The tremendous nature of the dumb growth is made even more clear when “…at a generous estimate 1.75 million hides reached market over the eight years of the southern hunt…” (White, p.465) These figures show the negative side of creative destruction, as well as the dark side of capitalism and consumption, also showing the stark difference between the reasoning behind hunting the bison by the Native Americans and the hunters.
Although we saw great historic transformation, the great takeaway from this section and chapter is that in purely economic terms, Joseph Schumpeter’s idea of creative destruction is rational, justifiable even. Yet when put into practice as seen with the railroads in the American west, the real consequences may not be so rational. Forcing the creation of an industry in a place where it is unlikely, is a recipe for destruction, not the creative kind, but the literal kind. And so went the creative destruction of the non-existent economic system of the American west brought about by the railroads, leading to “…the social costs of farm and business failures, the dispossession of Indian peoples, the degradation of the environment and the waste of resources…” (White, p.462)
A very thoughtful and focused post–I agree that the concept of “dumb growth” is central to White’s argument and, in some ways, the opposite of Schumpeter’s “creative destruction.” In terms of the latter, how can we gauge whether the “creativity” (progress) is worth the “destruction” (economic and social costs), and what does White say is wrong with the way economists and social scientists usually calculate social benefits vs. costs? Is it possible to imagine a counterfactual history in which the transcontinentals were built in such a way that bison herds were preserved, Indians retained their lands, supply and demand were brought into equilibrium more rationally?
I’m a little unclear on the distinction you make between “need” and “desire” in para 2. If the desire for profit is what drives entrepreneurs and innovation in a capitalist economy, is it reasonable or even possible to ask them to adjust their desires to fit the needs of society (if that is indeed what you’re getting at)? What would that look like, and how could societies preserve a role for individual innovation and private profit?
Hi professor,
Appreciate the comment. What I meant in paragraph 2 with the distinction between the need and desire, is that to me, creative destruction is driven by a need. Maybe I used the wrong terminology, now that I think about it, they both seem to imply the same thing. That creative destruction and a change in a market/industry is brought about by both need and desire, they are interchangeable in this context.
As for the second point, I don’t know if entrepreneurs or companies would really care for adjusting their desire for profit in order to fit the needs of society. I can imagine they would do the bare minimum to satisfy such a requirement if it were imposed upon them by law.